Step by Step Guide on VA Loans for Manufactured Homes.
VA loans can be used for many types of homes. At first glance, it’s easy to see how single-family homes, condos, and townhomes can be purchased with a VA loan, but what about manufactured homes? With proper research and assistance, a veteran can purchase a manufactured home with a VA loan.
What is a Manufactured Home?
Manufactured homes are built and assembled in factories in pieces, then transported to the home site for installation. These homes can be 10-20% cheaper than single-family homes, thus making it a viable option for veterans.
Sometimes “modular home” and “manufactured home” are used interchangeably. This is not correct – because even though a modular home is built in a factory as well, modular homes are transported differently and must follow different (and more stringent) code regulations.
Manufactured Home VA Loan Considerations
Although manufactured homes can be a convenient and affordable option, there are multiple considerations to take into account:
1. Lenders may be harder to find
According to historical statistics, borrowers who purchase manufactured homes are more likely to default on their loans, thus making lenders more hesitant to approve manufactured home purchases. Manufactured homes also have a more rapid depreciation than single-family homes, condos, or townhomes. This causes lenders to consider VA Loans for manufactured homes a riskier liability.
2. Shorter loan terms
For VA loans for single-family homes, buyers can get a term of 30 years. Though manufactured homes typically cost less, the maximum loan terms for manufactured homes are shorter.
Smartasset.com states the following VA Loan terms for manufactured homes:
• 20 years and 32 days for single-wide manufactured homes
• 23 years and 32 days for double-wide manufactured homes
• 25 years and 32 days for double-wide home and a lot
3. The borrower must own the lot where the home will be set
If you’re considering purchasing a manufactured home in a mobile home park where the lot is rented, you’re unfortunately out of luck. The VA regulations state that the veteran must own or be purchasing the lot to receive a VA loan approval.
4. Different building codes and inspections
Although there are required code inspections for things like electrical and plumbing, there are no required inspections or codes for the structural integrity of manufactured homes. This is an important caveat to consider – especially when purchasing an older manufactured home.
What other requirements are there for VA Loans on manufactured homes?
Just like a regular VA loan, manufactured homes must meet the VA Handbook Minimum Property Requirements.
VA regulations also require that a manufactured home be placed on a permanent foundation. If the home remains on wheels, it is considered a vehicle and will not be eligible for VA funding.
Getting a VA loan on a manufactured home is a different process but possible. As a borrower, it’s important to consider all of the pros and cons of the different styles of homes. Borrowers should also choose their lender carefully. If you would like assistance with finding a qualified lender for a manufactured home, feel free to check out ADPI’s affiliated lender list.
